Healthcare came to the forefront during the height of the Covid-19 pandemic, but that doesn’t mean interest in the sector is waning. ETF investors looking for opportunities in healthcare with international exposure to China can look at the Global X MSCI China Health Care ETF (CHIH).
With CHIH, investors get unique exposure to a healthcare system that is structurally different from the United States. The ETF thus opens up unique opportunities for U.S. investors, ones that they can’t get domestically.
“China has a centralized healthcare delivery system with resources consolidated in large public hospitals, which collectively provide nearly 90 percent of outpatient and inpatient services,” a Becker’s Hospital Review article explained.
CHIH seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI China Health Care 10/50 Index. The fund invests at least 80% of its total assets in the securities of the underlying index and in ADRs and GDRs based on the securities in the underlying index.
The underlying index tracks the performance of companies in the MSCI China Index (the ‘parent index’) that are classified in the healthcare sector, as defined by the index provider. Overall, the fund gives ETF investors:
- Targeted Exposure: CHIH is a targeted play on the Health Care Sector in China – the world’s second largest economy by GDP.
- ETF Efficiency: In a single trade, CHIH delivers access to dozens of healthcare companies within the MSCI China Index, providing investors an efficient vehicle to express a sector view on China.
- All Share Exposure: The Index incorporates all eligible securities as per MSCI’s Global Investable Market Index Methodology, including China A, B, and H shares, Red chips, P chips, and foreign listings, among others.
China’s Healthcare Tech Continues to Improve
As China’s economy rapidly proliferates, so does its healthcare technology. Right now, the U.S. is in pole position when it comes to healthcare tech, but China is not too far behind.
“The U.S. has led the world in advanced technologies and funding for drug development, medical equipment and clinical research,” the Becker’s Hospital Review article said. “China is rapidly catching up in this area, growing by 16.9 percent in global research funding and development in recent years, and everyone stands to benefit from increased collaboration.”
“According to the Nature Index database on scientific research cooperation and big science, China has become the second largest scientific research partner of the United States after the European Union from 2012 to 2018,” the article added.
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